Question :
125.The following facts pertain to Montecello Corporation for 20×7:
Retained Earnings : 1244199
125.The following facts pertain to Montecello Corporation for 20×7:
Retained Earnings balance, January 1, 20×7
$400,000
Cash dividends declared and paid in 20×7
$53,000
Retained Earnings balance (after closing), December 31, 20×7
$520,000
Net income for 20×7
?
Based on the above facts, net income for 20×7 for Montecello Corporation amounted to
a.
$133,000.
b.
$153,000.
c.
$193,000.
d.
$173,000.
126.All of the following are synonymous with retained earnings except
a.
earnings retained for use in the business.
b.
cash fund for future expansion.
c.
retained income.
d.
accumulated earnings.
127.In accounting, the term deficit refers to
a.
an excess of actual expenses over amounts budgeted for those expenses.
b.
an excess of expenses over revenues for one given operating period.
c.
income of a prior period that was overstated when it was first reported.
d.
a Retained Earnings account with a debit balance.
128.The balance of the Retained Earnings account represents
a.
cash set aside for specific future uses.
b.
profits of a company since the date of its beginning less any losses, dividends to stockholders, or transfers to contributed capital.
c.
an excess of revenues over expenses for the most current operating period.
d.
cash available for daily operations.
129.Which of the following items will not be disclosed on a statement of stockholders’ equity?
a.
Issuance of common stock for cash
b.
Issuance of common stock in exchange for noncash assets
c.
Net income
d.
Extraordinary gains and losses
130.The purpose of a statement of stockholders’ equity is to
a.
replace the statement of retained earnings.
b.
budget the transactions expected to occur during the forthcoming period.
c.
summarize the changes in the components of stockholders’ equity for a period of time.
d.
disclose the computation of book value per share of stock.
131.The preparation of a statement of stockholders’ equity makes which other financial statement unnecessary?
a.
Statement of retained earnings
b.
Income statement
c.
Balance sheet
d.
Statement of cash flows
132.Which of the following would not affect the balance of the Retained Earnings account?
a.
Stock split
b.
Net loss
c.
Stock dividend declared
d.
Cash dividend declared
133.All of the following would appear in the statement of stockholders’ equity except
a.
net income.
b.
declaration of a stock split.
c.
an issuance of common stock.
d.
declaration of cash dividends.
134.Which of the following items will not be disclosed in a statement of stockholders’ equity?
a.
Purchase of treasury stock
b.
Declaration of a stock dividend
c.
Conversion of preferred stock into common stock
d.
Results of discontinued operations
